CITIZENS GUIDE POPULAR ANNUAL FINANCIAL REPORT

Transcription

1 CITIZENS GUIDE POPULAR ANNUAL FINANCIAL REPORT For Fiscal Year Ended June 30, 2010

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3 CONTENTS Message to Wixom Citizens 3 Who We Are, City Officials 4 About Our City 5 Community Profile 6 Financial Information Revenues 7 Financial Information Expenditures 8 Financial Information Assets & Liabilities 9 Historical Revenues 10 Historical Expenditures 11 Financial Highlights 12 Where do we stand? 13 City Budget 14 City of Wixom Entrepreneurial City University of Michigan Wixom A community you can LIVE in! Named an Entrepreneurial City by the University of Michigan Dearborn School of Management in 2007, 2009, 2010, Wixom has a mix of high-quality residential living and a strong diverse industrial base. Centered around the Wire House, Gibson Farm and a 300-acre nature preserve, with walking paths and wildlife viewing, Wixom maintains the best of country living within the urban fringe, having the tenth-lowest tax rate in Oakland County, has one of the lowest combined water and sewer rates in Oakland County and boasts of one of the finest school districts in the state. Wixom is rich in history and has demonstrated commitment to the environment and preservation of our natural resources. Our connection to the past, commitment to the environment, business sensitive management philosophy, organizational culture and entrepreneurial spirit all coupled with a multitude of civic events, culminate in a strong sense of community that is uniquely Wixom. You won t find a better hometown anywhere. 2

4 April 8, 2011 To the Citizens of the City of Wixom: It is with great pleasure that we present to you the City of Wixom s first Popular Annual Financial Report (PAFR) for the fiscal year ended June 30, The intent of this report is to provide you with our annual financial and operating information in a more clear and user friendly manner. We hope that this report is useful for you to better determine the City of Wixom s financial condition. The information provided in this report is derived primarily from the 2010 Comprehensive Annual Financial Report (CAFR). The financial information provided in the CAFR was independently audited by Plante & Moran, PLLC, and was prepared in accordance with generally accepted accounting principles (GAAP). The City has once again received an unqualified ( clean ) opinion from our auditors which is the highest form of financial assurance that an organization can receive from their audit firm. Unlike the CAFR, this PAFR is unaudited and not prepared in accordance with GAAP. Only the financial data for the primary government is included in this report and all of the City s discretely presented components units are excluded. Information in this report is condensed and summarized and certain financial statements and note disclosures required by GAAP are not included. A copy of the City s 2010 CAFR prepared in accordance with GAAP is located at We are proud that we have received the Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association for the sixth straight year for the fiscal year ended June 30, 2009 CAFR. A certificate is valid for one year only, and we believe that the City has met the requirements to receive the award for the fiscal year ended June 30, We would like to acknowledge Professor William LaGore and his students in Accounting 546, Public and Nonprofit Sector Accounting, at Eastern Michigan University for their contribution to this PAFR whose collaboration with the City of Wixom is much appreciated. The City of Wixom s finances are solid. A number of years ago, in a proactive approach to the economic projections, the City adopted a Five Year Fiscal Action Plan. This Plan, which includes a Budget Stabilization Fund, has provided a means to maintain consistency in taxes while avoiding service reductions during the current state of the economy. Partly attributable to the Five Year Action Plan, the State of Michigan Department of Treasury has rated Wixom s financial strength and future as superior. Only 13.4% of Michigan cities were able to attain this rating. Further, Moody s has continued to affirm an A1 bond rating for the City citing sound financial operations characterized by healthy reserves and prudent fiscal management. We hope you find this information interesting and informative. We welcome any feedback and suggestions regarding the information provided in this report. Respectfully, J. Michael Dornan Kevin Brady City Manager Finance Director 3

5 WHO WE ARE WHO WE ARE City of Wixom Officials As of June 30, 2010 Mayor: Kevin W. Hinkley, (248) City Council: Meetings: Richard Ziegler, Mayor Pro Tem Patrick Beagle James Cutright John Lee Lori Rich Thomas Rzeznik 7:30PM, 2nd and 4th Tuesday of each month City Hall City Council Chamber Pon ac Trail Wixom, MI Manager: J. Michael Dornan, (248) Clerk: Linda Kirby, (248) Organiza onal Chart as of June 30,

6 ABOUT OUR CITY Public School Enrollment School District Year Enrollment Novi ,221 South Lyon ,072 Walled Lake ,779 Housing Sales 2010 # of Sales Median Sale $130, Avg DOM # of Sales Median Sale $147, Avg DOM # of Sales Median Sale $160, Avg DOM 162 Realcomp (2010 through April only) Top Employers Rank Company Name Industry Industry 1 Great Lakes Rubber Co. Fabricated rubber products 2 Mac Valves Inc. Fluid power valves and hose fi ngs 3 Nlb Leasing LLC Equipment rental and leasing 4 Rockwell Medical Technologies, Inc. Surgical and medical instruments 5 Trijicon Inc. Op cal instruments and lenses 6 NGK Spark Plugs USA Motor vehicle parts and accessories 7 H2H Solu ons, Inc. Home health care services 8 Walled Lake School District Primary educa on Market Research Services Oakland County Planning and Economic Development 2100 Pontiac Lake Road, 41W, Waterford Michigan

7 Economy & Jobs COMMUNITY PROFILE The 2000 Census reported that 15.8% of Wixom residents work in Wixom; 10.5% of Wixom residents work in Novi. More than 5% of Wixom residents also commute to each of these Michigan ci es: Southfield; Farmington Hills; and Detroit. Detroit residents are the second highest employed workers in Wixom, behind Wixom residents. Wixom also draws workers from Commerce Township, Novi, and Livonia. Demographics Resident Population Source Data Based on es mated popula ons given by the 2010 U.S. Census,* Oakland County experienced a.76% popula on increase from July 2000 July The City of Wixom experienced a 4.9% popula on increase from *Calcula on based on es mated popula ons reported on SEMCOG Community Profiles h p:// 6

8 FINANCIAL INFORMATION Governmental Activities The governmental ac vi es are the main opera ng ac vi es for a city. Most city expenditures and revenues are accounted for in the general fund. In this sec on we will break down the revenues and expenditures of the governmental ac vi es for the City of Wixom. Revenues Where City Money Comes From Just like a for profit business, governments need sources of income (revenue) in order to operate. However, unlike businesses, governments do not solely rely on selling a good or service in order to create revenues. Most of a government s revenues come from assessing and collec ng taxes. The following chart shows the dollar amounts Wixom collected for each of its different sources of revenues. The table also gives 2009 data and displays the change from year to year. Revenues Change Charges for Services $1,644,794 $1,972,570 $(327,776) Grants & Contribu ons 979,741 1,700,184 (720,443) Property Taxes 8,649,835 8,591,365 58,470 Other 1,142,464 1,158,261 (15,797) Total $12,416,834 $13,422,380 $(1,005,546) 2010 Revenues The other revenue category consists of state shared revenue, earnings from unrestricted investments the City holds, and miscellaneous revenues. All revenues, except for property taxes, experienced a decline from Charges for Services Grants & Contributions Property Taxes Other The following further breaks down revenues earned from charges for services for 2009, 2010, and the percentage change between the two years. These are revenues earned from charges paid by ci zens for services provided by the city; they are not taxes collected by the city. Charges for Services Revenues Change % Change General Government 236, ,077 (37,708) 14% Public Safety 125, ,935 (12,602) 9% Public Works 562, ,188 (277,246) 33% Health & Welfare (Solid Waste Fees) 480, ,900 13,594 3% Recrea on & Culture 239, ,470 (13,814) 5% Total $1,644,794 $1,972,570 ($327,776) 17% 7

9 FINANCIAL INFORMATION FINANCIAL INFORMATION Expenditures Where City Money Goes Expenditures are the costs the government incurs while performing its every day job. The revenues collected by the government are used to pay the expenditures, just like a for profit business. The expenditure categories listed below represent the different areas the City used its money. Expenditures can be for programs and ac vi es, paying for financing, or for City sponsored business type ac vi es. Dollars Expenditures 2010 % 2009 % Change % Change General Government 2,617,704 20% 2,493,525 19% 124,179 5% Public Safety 4,444,068 33% 4,571,986 34% (127,918) 3% Public Works 4,415,449 33% 4,339,179 33% 76,270 2% Health & Welfare (Solid Waste costs) 479,333 4% 474,337 4% 4,996 1% Recrea on & Culture 807,578 6% 833,878 6% (26,300) 3% Interest on Long term debt 560,704 4% 609,698 5% (48,994) 8% Total $13,326, % $13,324, % $2,233 0% 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 General Government Comparison of 2009 and 2010 Governmental Activities Expenditures FY2010 ($13,326,846)& FY2009 ($13,324,612) Public Safety Public Works Health & Welfare (Solid Waste costs) Recreation & Culture Interest on Long term debt FY2010 2,617,704 4,444,068 4,415, , , ,704 FY2009 2,493,525 4,571,986 4,339, , , ,698 The following list provides a more detailed explana on of the Governmental Ac vi es expenditure categories: General government expenditures include the administra on of City offices and officials. This includes the following func ons and Departments: City Council, City Manager s Office, Clerk s Office, Assessing Department, Finance Department, Informa on Systems Department, Legal Counsel, General Opera ng and Maintenance, and certain Boards & Commissions. Public safety expenditures include the Wixom Police and Fire departments. Public works includes the DPW Department, which includes maintenance of City streets, parks, and other infrastructure, Building Department, Planning Commission and the Board of Appeals. Health and welfare are expenditures for the City s Solid Waste Collec on program through Resource Recovery and Recycling Authority of Southwest Oakland County (RRRASOC) whose member communi es include Farmington, Farmington Hills, Novi, Southfield, South Lyon, Walled Lake, and Wixom. Recrea on and culture are expenditures for the City s Parks & Recrea on Department, Cultural Center ac vi es, Senior s Commission ac vi es and Beau fica on Commi ee ac vi es sponsored by the City. Interest on long term debt are interest charges from long term debt of the City which includes debt for Major Road Improvements, Fire and DPW Building construc on and renova on, Special Assessments, and Downtown Development/Village Center Area improvements. All revenue and expenditure informa on was taken from the Change in Net Assets statement in the Management Discussion and Analysis sec on of Wixom s CAFR. 8

10 Assets and Liabilities FINANCIAL INFORMATION FINANCIAL INFORMATION To be er gauge the financial state of the city, we also need to look at the City s assets and liabili es. Looking at the City s assets and liabili es, along with the revenues and expenditures, will give us a complete financial picture of the City. Assets are considered anything tangible or intangible of value owned by the City that will provide future benefits. Liabili es are amounts owed to others. The following table shows the difference in Wixom s assets and liabili es as of June 30, Condensed Statement of Net Assets June 30, 2010 Governmental Business type Ac vi es Ac vi es Total Assets Cash and investments 13,105,060 10,571,156 23,676,216 Receivables, net 3,550, ,840 4,457,918 Internal Balances (1,527,155) 1,527,155 Capital Assets 43,074,759 54,042,509 97,117,268 Other Assets 797, ,922 1,304,460 Total Assets 59,000,280 67,555, ,555,862 Liabili es Payables and accrued liabili es 1,397, ,068 2,146,609 Compensated absences: Due in one year 414, ,573 Due in more than one year 215,065 Long term debt: Due in one year 1,350, ,953 2,287,953 Due in more than one year 10,325,000 9,492,725 19,817,725 Other liabili es 410, , ,474 Total Liabili es 14,112,544 11,713,855 25,826,399 Net Assets 44,887,736 55,841, ,729,463 Below are explana ons of a few of the asset and liability accounts. Receivables are amounts owed to the City. Capital assets represent office furnishings, equipment, vehicles, land, buildings and the City s infrastructure including major and local roads, sidewalks, bike paths and u lity and storm water systems. Payables and accrued liabili es represent amounts owed by the City to companies or individuals who supply goods or services to the City including accrued payroll and taxes. Long term debt are amounts owed by the City for the issuance of debt. 9

11 PAST FINANCIAL INFORMATION Historical Revenues Taking into account how the City has performed in the past is essen al to understand how it is doing now. We will dive deeper in the historical revenues and look at total historical revenues for the en re Governmental Funds. The Governmental Funds are a broader classifica on for current funds, which includes governmental ac vi es discussed earlier. These Historical Revenues are reported on a Modified Accrual Basis (MAB), and are only showing Governmental Funds Ac vi es. The chart below represents the total historical revenues for the last five years. The numbers below were taken from the Governmental Funds Statement of Revenue, Expenditures, and changes in Fund Balances for the year ended June 30, Governmental fund revenues come from various sources. The following chart indicates where the different sources of revenues have come from over the past five years. From 2009 to 2010, revenue for the Governmental Funds decreased by 6.36 percent. Some of the contribu ng factors over the year are decreases in property taxes, State Shared revenue, LDFA contribu on for road projects (Component Unit), licenses, permits, and development fees and deposits, and elimina on of Library contribu on for use of facili es. 10

12 PAST FINANCIAL INFORMATION Historical Expenditures Now that we have looked at historical revenues, we will turn our a en on to historical expenditures for the Governmental Funds. The chart below represents the total historical expenditures for the last five years. The numbers below were taken from the Governmental Funds Statement of Revenue, Expenditures, and changes in Fund Balances for the year ended June 30, From 2009 to 2010, expenditures for Governmental Funds decreased by 5.25 percent. Some of the factors that caused expenditures to decrease over the year were general opera ng expenses, police and fire department expenditures, and public safety. Below is a further breakdown of historical expenditures by ac vity. 11

13 Other Important Financial Information and Recap FINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS The following represents the most significant financial highlights for the fiscal year ended June 30, 2010: The current assets of the City s governmental ac vi es exceed its current liabili es at the close of June 30, 2010 by $12,205,275. The current assets of the City s business type ac vi es exceed its current liabili es at the close of June 30, 2010 by $11,423,658. The City s total debt during the fiscal year decreased from $24,203,812 to $22,105,678, a decrease of $2,098,134, which represents payments of outstanding debt. At the close of the current fiscal year, the City s governmental funds reported combined ending fund balances of $11,362,176, a decrease of $1,238,811. The decrease in fund balance is primarily due to total expenditures exceeding total revenues for all governmental funds by $1,238,811, which provided resources for assistance in Local Roads Capital Program to be used for road projects $(918,962), land acquisi on purchases for $(223,404), payment of prior year other post employee benefits (OPEB) contribu on for $493,918, assistance in funding of capital improvement projects through the City s five year capital improvement plan, payments from Special Agency Fund, and the payment of debt service. The total debt per capita shows us the amount of debt the city has per each resident. The Ra o of debt to taxable value for 2010 was 2.57%. For the City popula on of 14,500, the total debt per capita for 2010 was $1,525. There has been a steady decline of total debt per capita the last 10 years. Total net assets related to the City s governmental ac vi es decreased by $908,002. The chart below provides the sources for the change in governmental ac vi es total net assets. Category Net Change Decrease in net investment in capital assets (2,339,967) Increase in reserves for street and highway 262,950 programs Decrease capital projects expenditure reserves (18,149) Transfer of reserves for re ree benefits (493,917) Decrease in special agency reserves (119,252) Other Purpose Land Acquisi on Fund (222,019) Other Purpose Forfeiture Fund 9,528 Other Purpose Other Funds 149,883 Change in debt service funds and deferred 1,863,924 revenue Change in unrestricted net assets (983) Net Change to Net Assets Statement of (908,002) Ac vi es The net assets related to the City s business type ac vi es decreased by $512,178. This was primarily due to opera ng expenditures exceeding opera ng revenues by $1,483,725, contribu ons of water and sewer lines by developers of $93,708, and nonopera ng revenues in the amount of $877,839. The City s debt limit is $77,153,071 for Direct debt of $19,775,678 is subtracted from that amount to arrive at the Legal Debt Margin, or amount s ll legally available for the city to borrow. Only 25.63% of the Legal Debt Limit has been used, so 74.37% is available to the City. 12

14 State Shared Revenue WHERE DO WE STAND? WHERE DO WE STAND? Fiscal Year (State) Statutory Constitutional Total % Change Dollar Amount 10/31/ , ,664 1,372,133-2% (24,882) 10/31/ , ,432 1,329,660-3% (42,473) 10/31/ , ,153 1,268,471-5% (61,189) 10/31/ , ,548 1,140,042-10% (128,429) 10/31/ , ,419 1,127,616-1% (12,426) 10/31/ , ,663 1,115,069-1% (12,547) 10/31/ , ,741 1,081,862-3% (33,207) 10/31/ , ,513 1,081,862 0% - 10/31/ , ,098 1,029,447-5% (52,415) 10/31/ , , ,590-11% (113,857) Total -30% (481,425) Though the State increased their income tax rate from 3.9% to 4.35% and raised their sales tax to 6% on certain services, the State s ll has severe budget problems. On March 21, 2011, Governor Snyder announced in his le er to the Michigan Legislature that he has proposed the statutory revenue sharing program be discon nued and replaced with the new Economic Vitality Incen ve Program. Funding for the first year is expected to limit alloca on to communi es that are expected to receive over $6,000 of the new reduced funding under the exis ng formula. Communi es must qualify for this funding by mee ng certain requirements based on best prac ces and implemen ng reforms. Local governments must also produce a ci zen s guide to their finances, as well as a dashboard by October 1, Ci zens of the City of Wixom can look forward to greater transparency and understanding through these documents. The City of Wixom may also try to adopt a mul year budget for fiscal years 2012 and Source: h p:// 1_348148_7.pdf Tax Mix The diverse tax mix of residen al, manufacturing, office, service, technology, and retail recrea onal centers reduces Wixom s impact of adverse economic cycles and provides a stable environment for new investment. The City also con nues to have a strong, diversified tax base. A total of 36% of the tax roll is residen al and apartments. The remaining 64% is nonresiden al, composed of 14% commercial, 34% industrial and 16% personal property. The City is approximately 80 percent developed. Property Taxes Property taxes were collected from the following (ordered from most to least) during the past 10 years: 1. Residen al 2. Industrial 3. Personal 4. Commercial 5. IFT 6. Agricultural (None collected since 2007) 13

15 CITY BUDGET CITY BUDGET The differences between the final amended budget and the actual amounts were significant in the revenue and expenditure areas. Revenues received were lower than budgeted by $512,626 or 4.5%, while expenditures were 6.8 % less than budgeted ($698,861) Budget Highlights The differences between the original budget and the final amended budget for revenues was 2/10ths of 1% and for overall expenditures remain the same for FY2010. The original General Fund budget planned to appropriate $307,935 from Fund Balance, while the actual appropria on was for $106,478. The City of Wixom amended the budget to take into account unan cipated events during the year. The most significant event was the merging of the Capital Planning Fund with the Capital Improvement Fund. The Capital Planning Fund was a mechanism to fund and support the Capital Improvement Fund s 5 year capital plan. During the budget process each Department provided a five year projec on of capital improvement expenditures. The Capital Planning Fund was used to even out the funding needs for these expenditures over a five year period as planned. This merger was done to comply with future GASB Statement 54, Fund Balance Repor ng and Governmental Fund Type Defini ons. The difference between the original budget and the final budget was 2/10ths of 1% and overall expenditures remain the same for fiscal year Budgeting for 2011 Description Amended Budget Original Budget Difference Percent Change The FY2011 General Fund budget calls for overall expenditures to decrease to $9,663,953, compared to the amended budget for fiscal year 2010 with overall expenditures of $10,275,655. This is an approximate 6.0 percent decrease, or a reduc on of $611,702 in total General Fund budgeted expenditures over the previous year. 14

16 Index of Supplemental Information SUPPLEMENTAL INFORMATION SUPPLEMENTAL INFORMATION Index of Supplemental Information In July 2011 the Local Audit and Finance Division, Bureau of Local Government Services of the State of Michigan provided guidance on preparing a Citizens Guide and Performance Dashboard to meet part of the provisions of the Economic Vitality Incentive Program. The City may use the Popular Annual Financial Report (refer to the Government Finance Officers Association (GFOA) award program) as the Citizens Guide, if it includes additional information about unfunded liabilities. You will find additional information related to unfunded liabilities and the Water and Wastewater Utility Funds. Beginning October 1, 2011, the City will need to meet certain requirements to be eligible for a portion of statutory revenue sharing under PA 140. Under the Economic Vitality Incentive Program (EVIP) the City will need to meet three requirements. As indicated on the State of Michigan s website Public Act 63 of 2011, introduced the Economic Vitality Incentive Program. Each city, village, or township that received a FY 2010 statutory payment greater than $4,500 and fulfills the specific requirements for all of the three categories will be eligible to receive a maximum of % of its FY 2010 total statutory payment (rounded to the nearest dollar). An eligible city, village, or township will receive 1/3 of the maximum amount for each of the three categories they fulfill the specific requirements for. The three categories are Accountability and Transparency, Consolidation of Services, and Employee Compensation. Each eligible city, village, or township must submit the certification form and required attachments for each category to qualify for payment. Any local unit that falsifies certification documents shall forfeit any future economic vitality incentive program payments and shall repay the state all economic vitality incentive program payments it has received. Detailed information regarding each category can be found in Public Act 63 of Estimated City of Wixom Projected EVIP Payments Description Category 1 Accounting & Transparency Requirement 1: Accountability and Transparency Economic Vitality Incentive Program (EVIP) City of Wixom Projected Payments for Fiscal Year 2012 Category 2 Consolidation Category 3 Employee Compensation Payment Amounts $16,533 $16,533 $16,534 $49,600 Citizens Guide The purpose of the Citizens Guide and Popular Annual Financial Report is to provide citizens with a document that will help them better understand their City s finances. We hope this presentation which shows important financial measures will be easily understood by the City s citizen. Total Performance Dashboard The City is preparing the Performance Dashboards to be included on our website. These Dashboards will include interactive financial and operating measures that are most important to the government and its citizens. As indicated by the State Meeting this criterion will require the local unit to report on measures such as fiscal stability, economic strength, public safety, quality of life and other measures the local unit select that are relevant to the local unit s strategic goals and objectives. Requirement 2: Consolidation of Services By January 1, 2012 the City must prepare a consolidation plan with proposals on how to increase existing levels of cooperation, collaboration and consolidation. The report must include past efforts in collaboration along with estimated cost savings and potential future savings. Requirement 3: Employee Compensation By May 1, 2012 the City must certify that they intend to implement certain changes to the employee compensation packages. These changes will include any employment contracts for any new, modified or extended contract. 15

17 PENSION AND OPEB HIGHLIGHTS PENSION AND OPEB HIGHLIGHTS Pension Plan Highlights The City participates in the Municipal Employees Retirement System of Michigan (MERS), an agent multiple-employer defined benefit pension plan that covers substantially all full-time employees of the City. MERS provides retirement, disability, and death benefits to plan members and their beneficiaries. The MERS issues a publicly available financial report that includes financial statements and required supplementary information for the MERS. Minimum Funding Requirements Funding levels were required at 50% funding prior to January 1, 2008, 60% funding commencing January 1, 2008, 80% funding commencing July 1, 2009, 100% funding commencing July 1, This means no improvements to MERS benefits can occur unless the City has reached the funding percentage. This policy is designed to help municipalities provide sustainable, affordable retirement benefits to their employees. Beginning in fiscal year 2006 new non-union employees will only be able to use the MERS Defined Contribution Plan. In addition, beginning with the December 31, 2006 annual actuarial valuations, the 30-year maximum amortization period for unfunded accrued liability shall be reduced to a 20-year maximum amortization period over the next 10 years. Annual pension cost was $757,748 for FY2010. OPEB Highlights Other Post Employment Benefits (OPEB): The City provides retiree health care benefits to eligible employees and their spouses. Currently, the plan has 59 members (including employees in active service, terminated employees not yet receiving benefits, and retired employees and beneficiaries currently receiving benefits). This is a single employer defined benefit plan administered by the Municipal Employees Retirement System (MERS). The benefits are provided under collective bargaining agreements or Executive Directives approved by City Council. Minimum Funding Requirements No funding levels are currently required. The City began to fund for this benefit in FY1993. Annual OPEB cost was $486,684 for FY

18 WATER ENTERPRISE HIGHLIGHTS WATER ENTERPRISE HIGHLIGHTS Water Enterprise Fund - The Water Enterprise Fund accounts for the operation and maintenance of the water supply system, capital additions, and retirement of revenue bonds. Financing is provided by user charges and contributions by other funds. This fund serves as the repositories for monies received by the City from the operation of the water system, bond sales, grants, payments, and capitol improvement expenditures from proceeds realized from the water utility system. The City uses these monies for the maintenance and improvement of our water distribution system, elevated storage tank and booster station facility and payment for water provided by Detroit Water and Sewer Department (DWSD). The funds supplied from utility revenue and connection fees are used to cover the cost of providing the current level of maintenance and planned capital improvement for the distribution system in the City. The City provides its residents water, which it purchases from the City of Detroit Water System. Approximately 50% of the City s water operating expense is related to the City of Detroit s wholesale charge for water service. The capital contribution for lines from developers decreased from $319,147 to $93,708. The Water Fund s operating expenses decreased from fiscal year 2009 with reduction due to decline in United Water s contract operations. The City has a 10 year contract with United Water for the operation and maintenance of the City s metering, booster station, elevated storage tank, water wells, and the distribution system. Water Enterprise Fund Highlights The proposed water utility rate for Fiscal Year decreased from $27.57/mcf to $25.45/mcf. The wholesale price for Detroit water is awaiting the approval by Detroit City Council to increase our wholesale rate from $13.85/mcf to $15.15/mcf or approximately 9%. Achievement Goals for FY Continuation of capital improvement program for replacement and repair of various hydrants and gate wells within the distribution system including Storz hydrant retrofit. Continuation of capital improvement program for replacement of older water meters in the system. Continue with the implementation of a Municipal Water System Cross-Connection Control Program in accordance with State of Michigan s Part 14 of Act 399 and the Rules promulgated pursuant to the Act to eliminate any potential of contamination into the water system. Utilize the leak detection survey to prioritize repairs. Capital Improvements of $ 204,600 are proposed for system improvements and upgrades for telemetry equipment and other contract repairs and replacements. The combined total water and wastewater rates for FY will remain at $36.57/mcf. 17

19 Wastewater Enterprise Fund Highlights WASTEWATER ENTERPRISE HIGHLIGHTS WASTEWATER ENTERPRISE HIGHLIGHTS Sewer Enterprise Fund - The Sewer Enterprise Fund accounts for the operation and maintenance of the sewage disposal system, capital additions and improvements, and retirement of revenue bonds. Financing is provided by user charges and contributions by other funds and municipalities. This fund provides for the collection, treatment and discharge of municipal wastewater including residential, commercial and industrial waste. Revenue generated for the fund includes various sources, such as, grants, bond sales and wastewater service billings. The Sewer Fund s operating expenses increased by $132,871 from fiscal year 2009 which was due to a increase in all utilities by $184,720 while other operating expenses decreased. It should be noted that United Water s new contract stipulated that the City will be responsible for sludge removal and utility costs. The City has a 10 year contract with United Water for the operation and maintenance of the City sewage disposal system and the wastewater treatment plant. The increase is due to a projected adjustment to the United Water contract. Funding for this expenditure is paid through utility revenues. The wastewater utility rate for Fiscal Year will increase from $9.00/mcf to $11.12/mcf, which reflects an increased rate to cover system operating costs while also using surplus funds from retained earnings. Currently, the City of Wixom s Sewer Rate is the lowest rate in Oakland County and one of the lowest in Michigan for these services. Therefore the combined total water and wastewater rates for FY will remain at $36.57/mcf. Achievement Goals for FY Continue to plan capital upgrades to correspond to the expansion from the sewer expansion from the Milford connection. Monitor energy savings after capital improvements are implemented. Construction of new ultra-violet system. Construction of new grit handling system. Capital Improvements $1,070,000 are proposed for system improvements for upgrading the ultra-violet and grit handling system improvements. 18

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